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Morningstar Senior Equity Analyst Rick Summer and Biltmore Capital Advisors CIO Tyler Vernon on Google’s third-quarter earnings and whether it is a ...
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Who we got 'cause I've got Tyler here Rick summer is right here on the phone with us some -- he's an analyst.
So sorry 12 I'm being told that work getting Rick back reestablishing him on the phone but let me get to Tyler here.
A Tyler Vernon is chief investment officer -- capital advisors and more than half a billion in assets under management for you Google buy sell hold right now.
I think you have to abide I think this is it these opportunities don't come up across all that often this was a sort of investor relations nightmare when you have bad news generally the CEO -- you you do it after market hours the CEO talked about it they put.
Positive news about it I mean if if you look into the details.
Growth was good revenues -- -- Motorola was actually up 19%.
-- clicks are growing at twice the amount as they're growing last year.
So at any kind of growth company that go through this and historically when -- -- pulled back it's been a great opportunity to buy and.
What's so hypocritical in -- way it was just a wanna say two weeks ago week and a half ago where everybody said oh apples yesterday Google is now the stock.
Up what you know somebody bought that yesterday a lot of people bought -- yesterday probably thirty million.
Shares were Durenberger trade at a more so it's.
Anyway yet again it not too much is has -- this is certainly some news it's they should cleared up at 4 o'clock so I would be a buyer on this pullback as long as it opens lower than where it's trading now.
Do you like Internet and tech stocks on balance.
And generally generally yes I think you have to be fairly choosy of of what you're doing and make sure that your -- going to the right area but at the end of the day.
Our country our world is more and more demanding of -- Companies are are getting more -- more automated they're demanding more tech and this is a a way that we'll continue -- We have the CEO of silence coming up in this -- -- silence is a genius company were they make pretty much.
Blank slate ships that you can program to do whatever you want and then erase them and reprogram them Amin Nasser everybody likes that Harry critically like that but yet.
-- this company and Intel saying macro economic conditions are very tough to you look at that as a time to purchase something.
That is on sale right now good company going through about time.
Sir I I think a company like -- -- this is a great contrary in Storey everybody's talking about slow slowdowns in PC and PC market.
-- the if you look at where for example -- -- trading at its less than a ten PE it's got a dividend of over 4% you're getting paid a lot of money to wait it's getting into Smartphones it's.
Getting at a cloud computing.
So in our opinion these -- -- companies were on sale and it's a great time to buy.
Let's see if Rick summer feels the same way hang out right here maybe you a question for him as well Rick -- senior equity analyst at Morningstar -- Rick first of all.
What happens when the stock opens in eleven minutes.
Yeah it'll be interesting I mean there's there's also have -- one of which has not been addressed yet as you -- we have a little bit more tepid revenue growth.
Now we have behalf disappointment -- moral ability.
One of the things that we're looking at is that actually appears to us that there's been a substantial increase and cost probably for content acquisition.
-- spending either on music and certainly as we all know heavy investment and video for it.
Well listen -- way of looking at a company is aggressive and we remember Google is a company that started off.
Simply as a search engine that they go to maps that -- -- -- I mean it's unbelievable.
Chrome all of the businesses I've been to their campus spent an entire day broadcasting their for fox business and I kept thinking to myself.
They're looking into research they've branched out and become so much more and pretty successfully so.
If they take the stumble right now is that an opportunity to get in on a stock what that.
Yeah -- mean -- -- -- -- the management -- we're -- 780 dollars a stock right now but we're still looking at this that is really more attractive to -- about what last night but it closed obviously.
Getting very close to that.
We're still seeing with this thing trends that we don't think -- alarming those trends are.
-- increase exposure to mobility which is driving out of the PPP -- but we're still being increased and paid.
They they sell mobility and get rid of it another despotic that would it would meet up.
It would be something over the long run that we would be excited to beat him and outside -- divesting we don't think that the business overall handset or certainly not -- and the home market.
But top box market for whether those are very good return on capital businesses.
-- this is Tyler Vernon it would sitting on over a 130 dollars in cash.
And -- other areas and other growth.
Areas of the business slowing down do you see them making more acquisitions to continue this growth -- they've had going forward.
Yeah I think so I mean historically go to -- then then also countries -- -- well obviously there's been a couple of big elephant they've they've bought that they preferred.
Stay below the frame -- by companies that are less than a billion dollars that question remains and we think the ethics -- larger risk for the company had an opportunity for the company.
Capital allocation will continue to become increasingly important for the company it -- it it is to cut debt debt as cash balance -- You know -- -- bring up Tivo because I saw slash a couple of days ago the Tivo was saying they would that Google load them billions of dollars in patent violations.
All related.
To what they acquired with Motorola mobility is Motorola but mobility becoming this gigantic problem for them that they probably didn't realize when they bought at.
There's probably an overstatement I think you don't want -- from an -- property perspective it would hurt.
Suggest that that's been negative for them do have acquired Motorola mobility.
The bigger overhang is really gonna be -- at the top box handset business.
-- make sure that is that definitely where the track of that -- -- -- speaker.
I think -- if you look at that.
-- issue would be about speed up other licensing agreement to help shore up at least the -- they present content they have alike.
Group with -- for example to be able present Google irony eat at Citi.
OK Rick thanks for getting on the phone really quickly we do appreciated -- -- our.
